<PAGE>
<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
[ ] Transition Report under Section 13 or 15(d) of the
Exchange Act
For the transition period from ______ to ______
Commission File Number: 0-24589
BCSB BANKCORP, INC.
- ---------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its
Charter)
UNITED STATES 52-2108333
- ------------------------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4111 E. JOPPA ROAD, SUITE 300, BALTIMORE, MARYLAND 21236
- ---------------------------------------------------------
(Address of Principal Executive Offices)
(410) 256-5000
-----------------------------------------------
(Issuer's Telephone Number, Including Area Code)
N/A
- ---------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
--- ---
As of May 14, 1999, the issuer had 6,116,562 shares of
Common Stock issued and outstanding.
Traditional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE>
<PAGE>
CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
Consolidated Statements of Financial Condition
as of March 31, 1999(unaudited) and
September 30, 1998 . . . . . . . . . . . . . . . .2
Consolidated Statements of Operations for the
Six Months and Three Months Ended March 31,
1999 and 1998 (unaudited). . . . . . . . . . . . .3
Consolidated Statements of Cash Flows for the
Six Months Ended March 31, 1999 and 1998
(unaudited) . . . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements. . . . . . 7
Item 2. Management's Discussion and Analysis or Plan
of Operation . . . . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . .16
Item 2. Changes in Securities and Use of Proceeds. . . . . .16
Item 3. Defaults Upon Senior Securities. . . . . . . . . . .16
Item 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . .16
Item 5. Other Information. . . . . . . . . . . . . . . . . .16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . .17
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . .18
1
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1999 1998
---------- ------------
(Unaudited)
Assets
------
<S> <C> <C>
Cash $ 2,789,304 $ 3,572,309
Interest bearing deposits in other banks 17,476,517 20,299,970
Federal funds sold 8,813,645 9,134,202
Investment securities, held to maturity 28,236,538 12,610,823
Loans receivable, net 190,953,395 181,969,226
Mortgage backed securities, held to maturity 26,032,256 34,197,844
Foreclosed real estate, net 292,910 370,690
Investment in real estate development and
loans to joint venture 5,972 8,195
Premises and equipment, net 3,256,036 2,988,558
Federal Home Loan Bank of Atlanta stock 1,650,300 1,511,900
Accrued interest receivable - loans 672,050 725,065
- investments 482,577 528,231
- mortgage backed
securities 154,245 196,136
Prepaid income taxes 239,388 175,870
Intangible assets acquired, net 8,915 24,497
Other assets 781,631 526,733
------------ ------------
Total assets $281,845,679 $268,840,249
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities
- -----------
Deposits $231,043,131 $220,804,724
Advance payments by borrowers for taxes
and insurance 2,492,238 850,397
Income taxes payable 59,477 60,792
Deferred income taxes 71,282 143,929
Payables to disbursing agents 230,994 249,430
Dividends payable 295,201 --
Other liabilities 1,876,760 1,587,929
------------ ------------
Total liabilities 236,069,083 223,697,201
Commitments and contingencies
Stockholders' Equity
- --------------------
Common stock (Par value $.01 - 13,500,000
authorized, 6,116,562 shares issued
and outstanding) 61,166 61,166
Additional paid-in capital 22,694,846 22,645,088
Retained earnings (substantially restricted) 25,518,708 25,221,308
------------ ------------
48,274,720 47,927,562
Employee Stock Ownership Plan (1,600,620) (1,829,280)
Stock held by Rabbi Trust (897,504) (955,234)
------------ ------------
45,776,596 45,143,048
------------ ------------
Total liabilities and retained earnings $281,845,679 $268,840,249
============ ============
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
2<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF OPERATIONS (OPERATIONS)
-------------------------------------------------
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED FOR THREE MONTHS ENDED
MARCH 31, MARCH 31,
-------------------- ----------------------
1999 1998 1999 1998
------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest Income
- ---------------
Interest and fees on loans $7,153,165 $6,606,209 $3,582,043 $3,278,050
Interest on mortgage backed securities 950,861 1,170,762 439,818 574,050
Interest and dividends on investment
securities 565,386 742,402 369,516 355,990
Other interest income 894,142 691,597 393,719 361,462
---------- ---------- ---------- ----------
Total interest income 9,563,554 9,210,970 4,785,096 4,569,552
Interest Expense
- ----------------
Interest on deposits 4,854,149 4,884,412 2,413,723 2,435,289
Interest on borrowings - short term 3,539 4,065 2,026 2,476
---------- ---------- ---------- ----------
Total interest expense 4,857,688 4,888,477 2,415,749 2,437,765
---------- ---------- ---------- ----------
Net interest income 4,705,866 4,322,493 2,369,347 2,131,787
Provision (reduction of provision) for
losses on loans 232,361 (39,274) 37,774 (75,524)
---------- ---------- ---------- ----------
Net interest income after provision
(reduction of provision) for losses
on loans 4,473,505 4,361,767 2,331,573 2,207,311
Other Income (Loss)
- -------------------
Gain (loss) on sale of foreclosed real estate 1,007 (17,111) (41,071) (15,162)
Servicing fee income 281 5,852 136 1,961
Fees and charges on loans 77,591 101,544 39,301 57,569
Fees on transaction accounts 89,292 78,642 40,162 37,173
Rental income 63,860 62,655 28,831 40,807
Gain from real estate development and joint
venture 6,038 -- -- --
Gain on sale of branch deposits -- 339,000 -- --
Miscellaneous income 33,341 55,016 13,403 19,796
---------- ---------- ---------- ----------
Net other income (loss) 271,410 625,598 80,762 142,144
Non-Interest Expenses
- ---------------------
Salaries and related expense 2,159,087 1,627,761 1,026,132 694,431
Provision for losses on foreclosed
real estate -- -- -- (13,236)
Occupancy expense 340,685 242,859 167,771 125,244
Deposit insurance premiums 68,943 107,132 26,584 52,710
Data processing expense 264,849 216,408 161,661 115,344
Property and equipment expense 248,283 178,182 129,402 89,289
Professional fees 112,829 59,882 32,912 30,987
Advertising 200,916 138,580 96,223 59,727
Telephone, postage and office supplies 166,753 153,446 85,569 83,682
Amortization of excess of cost over
fair value of net assets acquired 13,356 13,379 6,678 6,701
Other expenses 194,213 160,965 109,859 99,492
---------- ---------- ---------- ----------
Total non-interest expenses 3,769,914 2,898,594 1,842,791 1,344,371
---------- ---------- ---------- ----------
Income before tax provision 975,001 2,088,771 569,544 1,005,084
Income tax provision 382,400 825,042 221,708 398,668
---------- ---------- ---------- ----------
Net income $ 592,601 $1,263,729 $ 347,836 $ 606,416
========== ========== ========== ==========
Basic and diluted earnings per share $ 0.10 $ 0.06
========== ==========
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
3<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED
MARCH 31,
----------------------
1999 1998
------ ------
<S> <C> <C>
Operating Activities
- --------------------
Net Income $ 592,778 $1,263,729
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
-------------------------------------
Accretion of discount on investments 2,104 30,467
Loans originated for sale -- (133,000)
Proceeds from loans originated for sale -- 133,000
Loan fees (costs) deferred, net (2,235) 54,341
Amortization of deferred loan fees
(costs), net (137,608) (170,190)
Provision (reduction of provision) for
losses on loans 232,361 (39,274)
Non-cash compensation under Stock-Based
Benefit Plans 66,745 --
Amortization of premium on mortgage
backed securities 20,880 14,851
(Gain) loss on sale of foreclosed real
estate (1,007) 17,111
Gain from real estate development and
joint venture (6,038) --
Provision for depreciation 180,458 140,011
Decrease in accrued interest receivable
on loans 53,015 64,358
Decrease in accrued interest receivable
on investments 45,654 49,629
Decrease in accrued interest receivable
on mortgage backed securities 41,891 14,458
Increase (decrease) in prepaid income
taxes (63,518) 313,684
Increase (decrease) in deferred income
tax liabilities (72,647) 67,758
Amortization of excess of cost over fair
value of net assets acquired 13,356 13,379
Increase in other assets (252,672) (343,816)
Gain on sale of branch deposits -- (339,000)
Decrease in accrued interest payable
on deposits (49,817) (107,451)
Increase (decrease) in income taxes
payable (1,315) 13,601
Increase (decrease) in other liabilities
and payables to disbursing agents 270,395 (452,590)
--------- ---------
Net cash provided by operating
activities 932,780 605,056
</TABLE>
4<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED
MARCH 31,
----------------------
1999 1998
------ ------
<S> <C> <C>
Cash Flows from Investing Activities
- ------------------------------------
Proceeds from maturing interest bearing
deposits $ 2,252,000 $ 1,091,000
Purchase of interest bearing deposits (10,444,000) (5,000,000)
Purchases of investment securities - held
to maturity (25,053,819) (13,500,000)
Proceeds from maturities of investment
securities - held to maturity 9,426,000 26,542,824
Longer term loans originated (20,290,340) (16,744,333)
Principal collected on longer term loans 15,819,806 12,264,496
Net (increase) decrease in short-term loans (4,783,360) 2,852,416
Principal collected on mortgage backed
securities 8,626,673 5,429,611
Purchase of mortgage backed securities (481,965) (4,866,615)
Proceeds from sales of foreclosed real estate 230,019 2,000
Net investment and loans to joint venture -- 5,362
Proceeds from joint venture 8,261 --
Investment in premises and equipment (447,936) (37,015)
Purchase of Federal Home Loan Bank of Atlanta
stock (138,400) (78,700)
------------ ------------
Net cash provided (used) by investing
activities (25,277,061) 7,961,046
Cash Flows from Financing Activities
- ------------------------------------
Proceeds from sale of branch deposits -- (5,827,235)
Net increase in demand deposits, money
market, passbook accounts and advances
by borrowers for taxes and insurance 5,047,322 5,545,458
Net increase in certificates of deposit 6,882,743 2,398,332
Dividends declared on stock 295,201 --
------------ ------------
Net cash provided by financing
activities 12,225,266 2,116,555
------------ ------------
Increase (decrease) in cash and cash
equivalents (12,119,015) 10,682,657
Cash and cash equivalents at beginning
of period 31,074,481 12,136,626
------------ ------------
Cash and cash equivalents at end of period $ 18,955,466 $ 22,819,283
============ ============
</TABLE>
5<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED
MARCH 31,
----------------------
1999 1998
------ ------
<S> <C> <C>
The following is a summary of cash and
cash equivalents:
Cash $ 2,789,304 $ 3,950,017
Interest bearing deposits in other banks 17,476,517 21,200,882
Federal funds sold 8,813,645 8,658,384
------------ ------------
Balance of cash items reflected on
Statement of Financial Condition 29,079,466 33,809,283
Less - certificate of deposit with
a maturity of more than three months (10,124,000) (10,990,000)
------------ ------------
Cash and cash equivalents reflected on the
Statement of Cash Flows $ 18,955,466 $ 22,819,283
============ ============
Supplemental Disclosures of Cash Flows
Information:
Cash paid during the period for:
Interest $ 4,988,332 $ 4,991,863
============ ============
Income taxes $ 486,435 $ 430,000
============ ============
Transfer from loans to real estate
acquired through foreclosure $ 151,232 $ 132,359
============ ============
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
6<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------
Note 1 - Principal of Consolidation
--------------------------
BCSB Bankcorp, Inc. (the "Company") owns 100% of
Baltimore County Savings Bank, F.S.B. and subsidiaries
(the "Bank") and also invests in federal funds sold,
interest-bearing deposits in other banks and U.S.
Agency bonds. The Bank owns 100% of Baltimore County
Service Corporation and Ebenezer Road, Inc. The
accompanying consolidated financial statements include
the accounts and transactions of these companies on a
consolidated basis since the date of acquisition. All
intercompany transactions have been eliminated in the
consolidated financial statements. Ebenezer Road, Inc.
sells insurance products. Baltimore County Service
Corporation has invested in several joint ventures
formed for the purpose of developing real estate.
These investments have been accounted for on the equity
method and separate summary statements are not
presented since the data contained therein is not
material in relation to the consolidated financial
statements.
Note 2 - Basis for Financial Statement Presentation
------------------------------------------
The accompanying consolidated financial statements have
been prepared in accordance with generally accepted
accounting principles and the instructions to Form
10-QSB. Accordingly, they do not include all of the
disclosures required by generally accepted accounting
principles for complete financial statements. In the
opinion of management, all adjustments (none of which
were other than normal recurring accruals) necessary
for a fair presentation of the financial position and
results of operations for the periods presented have
been included. The financial statements of the Company
are presented on a consolidated basis with those of the
Bank. The results for the three months and six months
ended March 31, 1999 are not necessarily indicative of
the results of operations that may be expected for the
year ended September 30, 1999. The consolidated
financial statements should be read in conjunction with
the consolidated financial statements and related notes
which are incorporated by reference in the Company's
Annual Report on Form 10-KSB for the year ended
September 30, 1998.
Note 3 - Cash Flow Presentation
----------------------
For purposes of the statements of cash flows, cash and
cash equivalents include cash and amounts due from
depository institutions, investments in federal funds,
and certificates of deposit with maturities of 90 days
or less.
Note 4 - Earnings Per Share
------------------
Basic per share amounts are based on the weighted
average shares of common stock outstanding. Diluted
earnings per share assume the conversion, exercise or
issuance of all potential common stock instruments such
as options, warrants and convertible securities, unless
the effect is to reduce a loss or increase earnings per
share. No adjustments were made to net income
(numerator) for all periods presented. Earnings per
share data is not presented for the three month and six
month periods ended March 31, 1998, since the Bank
converted to the stock form in July 1998, and such
information would not be meaningful. The basic and
diluted weighted average shares outstanding for the
three months and six months ended March 31, 1999 is as
follows:
7<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------
Note 4 - Earnings Per Share (Continued)
------------------
<TABLE>
<CAPTION>
For the Six Months Ended March 31, 1999
-----------------------------------------
Income Shares Per Share
Basic EPS (Numerator) (Denominator) Amount
--------- ----------- ------------- ---------
<S> <C> <C> <C>
Income available to
shareholders $592,601 5,862,272 $ 0.10
Effect of dilutive shares -- 88,859 --
-------- --------- ------
Diluted EPS
-----------
Income available to common
stockholders plus assumed
conversions $592,601 5,951,131 $ 0.10
======== ========= ======
<CAPTION>
For the Three Months Ended March 31, 1999
-----------------------------------------
Income Shares Per Share
Basic EPS (Numerator) (Denominator) Amount
--------- ----------- ------------- ---------
<S> <C> <C> <C>
Income available to
shareholders $347,836 5,864,592 $ 0.06
Effect of dilutive shares -- 88,859 --
-------- --------- ------
Diluted EPS
-----------
Income available to common
stockholders plus assumed
conversions $347,836 5,953,451 $ 0.06
======== ========= ======
</TABLE>
Note 5 - Regulatory Capital
------------------
The following table sets forth the Bank's capital position at March 31,
1999.
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provision
------------------ -------------------- ------------------
% of % of % of
Amount Assets Amount Assets Amount Assets
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Tangible (1) $33,554,472 12.30% $ 4,092,357 1.50% N/A N/A
Tier 1 capital (2) 33,554,472 21.30% N/A N/A $ 9,452,955 6.00%
Core (1) 33,554,472 12.30% 8,184,714 3.00% 13,641,191 5.00%
Risk-weighted (2) 34,792,551 22.08% 12,603,940 8.00% 15,754,925 10.00%
<FN>
____________
(1) To adjusted total assets.
(2) To risk-weighted assets.
</FN>
</TABLE>
8<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
GENERAL
The Company was formed in June 1998 by the Bank to become
the holding company of the Bank following the Bank's
reorganization to the mutual holding company form of
organization (the "Reorganization"). The Reorganization was
consummated on July 8, 1998. All references to the Company
prior to July 8, 1998, except where otherwise indicated, are to
the Bank.
The Company's net income is dependent primarily on its net
interest income, which is the difference between interest income
earned on its loan, investment securities and mortgage-backed
securities portfolio and interest paid on interest-bearing
liabilities. Net interest income is determined by (i) the
difference between yields earned on interest-earning assets and
rates paid on interest-bearing liabilities ("interest rate
spread") and (ii) the relative amounts of interest-earning
assets and interest-bearing liabilities. The Company's interest
rate spread is affected by regulatory, economic and competitive
factors that influence interest rates, loan demand and deposit
flows. To a lesser extent, the Company's net income also is
affected by the level of other income, which primarily consists
of fees and charges, and levels of non-interest expenses such as
salaries and related expenses.
The operations of the Company are significantly affected by
prevailing economic conditions, competition and the monetary,
fiscal and regulatory policies of governmental agencies.
Lending activities are influenced by the demand for and supply
of housing, competition among lenders, the level of interest
rates and the availability of funds. Deposit flows and costs of
funds are influenced by prevailing market rates of interest,
primarily on competing investments, account maturities and the
levels of personal income and savings in the Company's market
area.
FORWARD-LOOKING STATEMENTS
When used in this Form 10-QSB, the words or phrases "will
likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project" or similar expressions are
intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties
including changes in economic conditions in the Company's market
area, changes in policies by regulatory agencies, fluctuations
in interest rates, demand for loans in the Company's market
area, and competition that could cause actual results to differ
materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers
not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The Company
wishes to advise readers that the factors listed above could
affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially
from any opinions or statements expressed with respect to future
periods in any current statements.
The Company does not undertake, and specifically disclaims
any obligation, to publicly release the result of any revisions
which may be made to any forward-looking statements to reflect
events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
YEAR 2000 READINESS DISCLOSURE
The following information constitutes "Year 2000 Readiness
Disclosure" under the Year 2000 Information and Readiness
Disclosure Act.
The Company's operations, like those of most financial
institutions, are substantially dependent upon computer systems
for lending and deposit activities. The Company is addressing
the potential problems associated with the possibility that the
computers which control its data processing activities,
facilities and networks may not be programmed to read four-digit
dates and, upon the arrival of the year 2000, may recognize the
two-digit code "00" as the year 1900 rather than 2000. This
could cause systems to fail to function or generate erroneous
information.
9<PAGE>
<PAGE>
The Company has formed a Year 2000 Committee with senior
representatives from every functional area of the Company. At
the direction of the Board, this Committee is leading the
efforts to ensure that the Company is ready for the Year 2000.
The Board of Directors has approved the Company's five phase
Year 2000 Plan that was developed in accordance with the
guidelines set forth by the Federal Financial Institutions
Examination Council.
The first phase, awareness, was intended to provide
on-going information to employees, directors and customers of
the impact of the Year 2000 issue. The Company has conducted
Year 2000 training for all directors and employees.
The second phase, assessment, required the review of all
systems that are believed to be potential risks in order to
minimize any Year 2000 operating difficulties. This review
included all major computer and non-computer based systems, such
as vaults, security systems and telephone systems. This phase
is complete.
The third phase, renovation and/or replacement, includes
obtaining vendor certification and/or the necessary upgrades and
enhancements to ensure that existing systems are Year 2000
compliant. The Company is continuing to follow up with third
party vendors as necessary. At this time the Company believes
that all mission critical systems are compliant.
The fourth phase, testing, is currently underway. The
hardware has been successfully tested, and the Company has begun
testing the software. The Company has received representations
from mission critical third party vendors that they are Year
2000 compliant. All mission critical testing has been
completed.
The last phase, implementation, has commenced and is
expected to be completed in the third quarter of calendar year
1999. The Company has developed contingency plans for processes
that are not yet Year 2000 compliant. This plan is updated as
test results are obtained. The contingency plan sets forth the
procedures that would allow the Company to conduct operations in
the event of one or more system failures, should such a failure
occur notwithstanding prior assurance from third party vendors.
The Company estimates that the total future cost of Year
2000 compliance, excluding internal staffing costs, will not
exceed $75,000. The Company believes that its policies, plans
and actions are in compliance with regulatory guidelines and
milestone dates.
The Bank's customers may also experience Year 2000
problems, which could adversely affect their ability to comply
with their obligations to the Bank. Management does not believe
that the failure of any single customer to be Year 2000
compliant would materially adversely affect the Company's
financial conditions or results of operations.
The Company believes that the potential effects on internal
operations from Year 2000 issues can and will be addressed prior
to the Year 2000. However, as unforeseen circumstances arise,
the Year 2000 issue could disrupt the Company's normal business
operations. The most reasonably likely worst case Year 2000
scenarios foreseeable at this time would include the inability
to systematically process, in some combination, various types of
customer transactions. This could affect the Company's ability
to accept deposits or process withdrawals, originate new loans
or accept loan payments in the automated manner currently
utilized. Depending upon how long this scenario lasted, this
could have a material adverse effect on the Company's
operations. The contingency plan addresses alternative methods
to enable the Company to continue to offer basic services to the
Company's customers. The costs of the Year 2000 project and the
benchmark dates are based on management's best estimates, which
are based on a number of assumptions including future events.
The Company cannot guarantee that these estimates will be
achieved at the cost disclosed or within the time frames
indicated.
10<PAGE>
<PAGE>
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND
SEPTEMBER 30, 1998
During the six months ended March 31, 1999, the Company's
assets increased by $13.0 million, or 4.8%, from $268.8 million
at September 30, 1998 to $281.8 million at March 31, 1999. The
Company has sought to increase loans in order to take advantage
of the higher yields on loans compared to investment securities
and mortgage-backed securities. Accordingly, the Company used
the proceeds from maturing mortgage-backed securities to fund
loan originations. Loans receivable, net increased by $9.0
million, or 4.9%, from $182.0 million at September 30, 1998 to
$191.0 million at March 31, 1999. The Company's mortgage-backed
securities decreased by $8.2 million, or 24.0%, from $34.2
million at September 30, 1998 to $26.0 million at March 31,
1999. The Company's investment securities increased by $15.6
million, or 123.9%, from $12.6 million at September 30, 1998 to
$28.2 million at March 31, 1999 as the Company invested the net
proceeds from its initial public offering. The Company's
deposits increased by $10.2 million, or 4.6%, from $220.8
million at September 30, 1998 to $231.0 million at March 31,
1999. The increase in deposits was achieved through increased
advertising and promotion activities.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED MARCH
31, 1999 AND 1998
Net Income. Net income decreased by $671,000, or 53.0%,
from $1.3 million for the six months ended March 31, 1998 to
$593,000 for the six months ended March 31, 1999. The decrease
in net income was primarily attributable to increased
non-interest expense, increased provisions for losses on loans
and decreased other income, which more than offset an increase
in net interest income.
Net Interest Income. Net interest income was $4.7 million
for the six months ended March 31, 1999, compared to $4.3
million for the six months ended March 31, 1998, representing an
increase of $383,000, or 8.9%. The increase was primarily due
to an increase in the ratio of average interest-earning assets
to average interest-bearing liabilities from 108.12% for the six
months ended March 31, 1998 to 116.74% for the six months ended
March 31, 1999 as a result of the Company's receipt of $22.3
million in net proceeds from its initial public offering
completed on July 8, 1998. This increase more than offset the
decrease in the interest rate spread from 3.24% for the six
months ended March 31, 1998 to 2.89% for the six months ended
March 31, 1999. This decrease in the interest rate spread
reflects a decrease in the yield on interest-earning assets as
the net proceeds from the initial public offering were invested
in lower yielding assets such as interest-earnings deposits and
short-term investments.
Interest Income. Interest income increased by $353,000, or
3.8%, from $9.2 million for the six months ended March 31, 1998
to $9.6 million for the six months ended March 31, 1999. This
increase was due primarily to a $547,000, or 8.3%, increase in
interest and fees on loans from $6.6 million for the six months
ended March 31, 1998 to $7.2 million for the six months ended
March 31, 1999. The increase in interest and fees on loans was
primarily due to a $26.3 million increase in the average balance
of loans receivable. Additionally, interest on other
interest-earning assets, which consist of interest-bearing
deposits in banks and Federal Funds sold, increased by $203,000,
or 29.3%, from $692,000 for the six months ended March 31, 1998
to $894,000 for the six months ended March 31, 1999. Such
increase reflected the investment of a portion of the proceeds
from the Company's initial public offering into interest-bearing
deposits and Federal Funds sold. These increases more than
offset decreases in interest on mortgage-backed securities and
interest and dividends on investment securities. Interest on
mortgage-backed securities decreased by $220,000, or 18.8%, from
$1.2 million for the six months ended March 31, 1998 to $951,000
for the six months ended March 31, 1999. This decrease was
primarily due to a $6.1 million decrease in the average balance
of mortgage-backed securities. Interest and dividends on
investment securities decreased $177,000, or 23.8%, from
$742,000 for the six months ended March 31, 1998 to $565,000
for the six months ended March 31, 1999. This decrease was
primarily due to a 137 basis point decrease in the average yield
on investment securities, as a significant portion of the
maturing investment securities carried relatively higher yields.
Interest Expense. Interest expense, which consists almost
entirely of interest on deposits, was $4.9 million for the six
months ended March 31, 1998 and the six months ended March 31,
1999. During the six months ended March
11<PAGE>
<PAGE>
31, 1999, an increase in the average volume of deposits was
offset by a 15 basis point decrease in the average cost of
deposits.
Average Balance Sheet. The following tables sets forth
certain information relating to the Company's average balance
sheet and reflects the average yield on assets and cost of
liabilities for the periods indicated and the average yields
earned and rates paid. Such yield and costs are derived by
dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods presented. Average
balances are computed using month-end balances.
The table also presents information for the periods
indicated with respect to the differences between the average
yield earned on interest-earning assets and average rate paid on
interest-bearing liabilities, or "interest rate spread," which
banks have traditionally used as an indicator of profitability.
Another indicator of an institution's net interest income is its
"net interest margin," which is its net interest income divided
by the average balance of interest-earning assets.
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
----------------------------------------------------------------------
1999 1998
--------------------------- --------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ------ ------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans . . . . . . . . . . . . . $186,016 $7,154 7.69% $159,686 $6,606 8.27%
Mortgage-backed securities. . . . . . 29,341 951 6.48 35,446 1,171 6.43
Investment securities and FHLB
stock. . . . . . . . . . . . . . . 19,188 565 5.89 20,441 742 7.26
Interest-bearing deposits in other
bank and Federal Funds sold . . . 34,851 894 5.13 25,784 692 5.37
-------- ------ -------- ------
Total interest-earning assets . . 269,396 9,564 7.10 242,357 9,211 7.60
Noninterest-earning assets . . . . . . . 9,799 9,440
-------- --------
Total assets. . . . . . . . . . . $279,195 $251,797
======== ========
Interest-bearing liabilities:
Deposits. . . . . . . . . . . . . . . $228,997 4,854 4.24 $222,601 4,884 4.39
Borrowings-short term . . . . . . . . 1,776 4 0.45 1,560 4 0.51
-------- ------ -------- ------
Total interest-bearing liabilities . . . 230,773 4,858 4.21 224,181 4,888 4.38
------ ------ ------ ------
Noninterest-bearing liabilities. . . . . 2,938 3,137
-------- --------
Total liabilities . . . . . . . . 233,711 227,298
Stockholders' equity . . . . . . . . . . 45,484 24,499
-------- --------
Total liabilities and stockholders'
equity . . . . . . . . . . . $279,195 $251,797
======== ========
Net interest income. . . . . . . . . . . $4,706 $4,323
====== ======
Interest rate spread . . . . . . . . . . 2.89% 3.24%
====== ======
Net interest margin. . . . . . . . 3.49% 3.57%
====== ======
Ratio average interest earning assets/
interest bearing liabilities . . . . 116.74% 108.12%
====== ======
</TABLE>
12<PAGE>
<PAGE>
Provision for Loan Losses. The Company established
provisions for loan losses of $232,000 for the six months ended
March 31, 1999 as compared to a $39,000 reduction of provisions
for loan losses for the six months ended March 31, 1998,
representing an increase of $271,000. In establishing such
provisions, management considered the increased size of the loan
portfolio, as well as an analysis of the risk inherent in the
loan portfolio and the increased emphasis on home equity loans,
which entail higher credit risks than residential mortgage
loans. In November 1998, a builder who had ten loans with the
Company totaling $700,000 declared bankruptcy. The Bank
foreclosed on November 9, 1998, which resulted in an anticipated
loss of $50,000, requiring the Company to increase its provision
for loan losses.
Other Income. Other income decreased by $355,000, or
56.6%, from $626,000 for the six months ended March 31, 1998 to
$271,000 for the six months ended March 31, 1999. The decrease
in other income for the six months ended March 31, 1999 was
attributable primarily to a $339,000 gain on sale of branch
deposits, as the Company sold the deposits of its Severna Park
branch in October 1997. In connection with such sale, the
Company sold deposits totaling $6.2 million and recognized a
gain of $339,000 representing a premium paid by the buyer on the
deposits sold. During the six months ended March 31, 1999, the
Company recorded a $1,000 gain on the sale of foreclosed real
estate, as compared to a $17,000 loss during the six months
ended March 31, 1998. Additionally, the decrease in other
income reflected a $24,000, or 23.6%, decrease in fees and
charges on loans from $102,000 for the six months ended March
31, 1998 to $78,000 for the six months ended March 31, 1999.
Fees were higher in the 1998 period due to one-time fees carried
on letters of credit.
Non-interest Expenses. Total non-interest expenses
increased by $871,000, or 30.0%, from $2.9 million for the six
months ended March 31, 1998 to $3.8 million for the six months
ended March 31, 1999. The increase in non-interest expenses was
due to increases in salaries and related expenses, occupancy
expense, data processing expense, property and equipment expense
and advertising expense. The Company's salaries and related
expenses increased by $531,000, or 32.6%, due to the recruitment
of personnel for new offices and the payment of severance
payments to the Bank's former President. Occupancy expense
increased by $98,000, or 40.3%, and property and equipment
expense increased by $70,000, or 39.3%, due to the expenses
associated with the establishment of new offices and the
relocation of the Bel Air office. Data processing expense
increased by $48,000, or 22.7%, due to expenses incurred in
upgrading the Company's computer systems and software to be
prepared for Year 2000 issues. The Company increased its
advertising expense increased by $62,000, or 44.6%, in an effort
to increase market share.
Income Taxes. The Company's income tax expense was
$382,000 and $825,000 for the six months ended March 31, 1999
and 1998, respectively. The Company's effective tax rates were
39.2% and 39.5% for the six months ended March 31, 1999 and
1998, respectively.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH
31, 1999 AND 1998
Net Income. Net income decreased by $258,000, or 42.6%,
from $606,000 for the three months ended March 31, 1998 to
$348,000 for the three months ended March 31, 1999. The
decrease in net income was primarily attributable to increased
non-interest expense, increased provisions for losses on loans
and decreased other income, which more than offset an increase
in net interest income.
Net Interest Income. Net interest income was $2.4 million
for the three months ended March 31, 1999, compared to $2.1
million for the three months ended March 31, 1998, representing
an increase of $238,000, or 11.1%. The increase was primarily
due to an increase in the ratio of average interest-earning
assets to average interest-bearing liabilities from 108.06% for
the three months ended March 31, 1998 to 116.77% for the three
months ended March 31, 1999 as a result of the Company's receipt
of the net proceeds from its initial public offering. This
increase more than offset the decrease in interest rate spread
from 3.17% for the three months ended March 31, 1998 to 2.89%
for the three months ended March 31, 1999. This decrease in the
interest rate spread reflects a decrease in the yield on
interest-earning assets as the net proceeds from the initial
public offering were invested in lower yielding assets such as
interest-earning deposits and short-term investments.
13<PAGE>
<PAGE>
Interest Income. Interest income increased by $216,000, or
4.7%, from $4.6 million for the three months ended March 31,
1998 to $4.8 million for the three months ended March 31, 1999.
Interest and fees on loans increased by $303,000, or 9.3%, from
$3.3 million for the three months ended March 31, 1998 to $3.6
million for the three months ended March 31, 1999 primarily due
to a $27.9 million increase in the average balance of loans
receivable as the Company implemented its strategy of increasing
loan originations. The increase in the average volume of loans
receivable more than offset a 57 basis decrease in the average
yield on loans. Additionally, interest and dividends on
investment securities increased by $14,000 and other interest
income increased by $32,000. These increases offset a $134,000,
or 23.4%, decrease in interest on mortgage-backed securities
from $574,000 for the three months ended March 31, 1998 to
$440,000 for the three months ended March 31, 1999. This
decrease in mortgage-backed securities was primarily due to a
$9.2 million decrease in the average volume of mortgage-backed
securities, as the Company pursued a strategy of using
repayments of mortgage-backed securities to fund loan
originations.
Interest Expense. Interest expense, which consists almost
entirely of interest on deposits, was $2.4 million for the three
months ended March 31, 1998 and the three months ended March 31,
1999. During the three months ended March 31, 1999, an increase
in the average volume of deposits was offset by a 17 basis point
decrease in the average cost of deposits.
Average Balance Sheet. The following tables sets forth
certain information relating to the Company's average balance
sheet and reflects the average yield on assets and cost of
liabilities for the periods indicated and the average yields
earned and rates paid. Such yield and costs are derived by
dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods presented. Average
balances are computed using month-end balance.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------------------------------
1999 1998
--------------------------- --------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ------ ------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans . . . . . . . . . . . . . . . . $188,271 $3,582 7.61% $160,343 $3,278 8.18%
Mortgage-backed securities. . . . . . 27,229 440 6.46 36,394 574 6.31
Investment securities and FHLB
stock. . . . . . . . . . . . . . . 26,854 369 5.50 20,522 356 6.94
Interest-bearing deposits in other
banks and Federal Funds sold . . . 29,695 394 5.31 26,809 362 5.40
-------- ------ -------- ------
Total interest-earning assets . . 272,049 4,785 7.04 244,068 4,570 7.49
Noninterest-earning assets . . . . . . . 9,293 9,115
-------- --------
Total assets. . . . . . . . . . . $281,342 $253,183
======== ========
Interest-bearing liabilities:
Deposits. . . . . . . . . . . . . . . $230,810 2,414 4.18 $223,953 2,435 4.35
Borrowings-short term . . . . . . . . 2,174 2 0.37 1,915 3 0.63
-------- ------ -------- ------
Total interest-bearing liabilities . . . 232,964 2,416 4.15 225,868 2,438 4.32
------ ------ ------ ------
Noninterest-bearing liabilities. . . . . 2,604 2,496
-------- --------
Total liabilities . . . . . . . . 235,588 228,364
Stockholders' equity . . . . . . . . . . 45,754 24,819
-------- --------
Total liabilities and stockholders'
equity . . . . . . . . . . . $281,342 $253,183
======== ========
Net interest income. . . . . . . . . . . $2,369 $2,132
====== ======
Interest rate spread . . . . . . . . . . 2.89% 3.17%
====== ======
Net interest margin. . . . . . . . . . . 3.48% 3.49%
====== ======
Ratio average interest earning assets/
interest bearing liabilities . . . . . 116.77% 108.06%
====== ======
</TABLE>
14<PAGE>
<PAGE>
Provision for Loan Losses. The Company established
provisions for losses on loans of $38,000 for the three months
ended March 31, 1999, as compared to a $76,000 reduction of
provisions for losses on loans for the three months ended March
31, 1998, representing an increase of $114,000. In establishing
such provisions, management considered the increased size of the
loan portfolio, as well as an analysis of the risk inherent in
the loan portfolio and the increased emphasis on home equity
loans, which entail higher credit risks than residential
mortgage loans.
Other Income. Other income decreased by $61,000, or 43.0%,
from $142,000 for the three months ended March 31, 1998 to
$81,000 for the three months ended March 31, 1999. The decrease
in other income for the three months ended March 31, 1999 was
attributable primarily to a $26,000 increase in losses on sales
of foreclosed real estate and a $18,000, or 31.0%, decrease in
fees and charges on loans from $58,000 for the three months
ended March 31, 1998 to $39,000 for the three months ended March
31, 1999. Fees were higher in the 1998 period due to one-time
fees carried on letters of credit.
Non-interest Expenses. Total non-interest expenses
increased by $498,000, or 37.1%, from $1.3 million for the three
months ended March 31, 1998 to $1.8 million for the three months
ended March 31, 1999. The increase in non-interest expenses was
due to increases in salaries and related expenses, occupancy
expense, data processing expense, property and equipment expense
and advertising expense. The Company's salaries and related
expenses increased by $332,000, or 47.8%, due to the recruitment
of personnel for the new offices. Occupancy expense increased
by $43,000, or 34.4%, and property and equipment expense
increased $40,000, or 44.9%, due to the expenses associated with
the establishment of new offices and the relocation of the Bel
Air office. Data processing expense increased $46,000, or
40.1%, due to expenses incurred in upgrading the Company's
computer systems and software to be prepared for Year 2000
issues. The Company increased its advertising expense by
$36,000, or 60.0%, in an effort to increase market share.
Income Taxes. The Company's income tax expense was
$222,000 and $399,000 for the three months ended March 31, 1999
and 1998, respectively. The Company's effective tax rates were
38.9% and 39.7% for the three months ended March 31, 1999 and
1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Bank exceeded all regulatory minimum
capital requirements. For information reconciling the Bank's
retained earnings as reported in its financial statements at
March 31, 1999 to its tangible, core and risk-based capital
levels and comparing such totals to the regulatory requirements,
see Note 5 of Notes to Consolidated Financial Statements.
The Company's primary sources of funds are deposits and
proceeds from maturing investment securities and mortgage-backed
securities and principal and interest payments on loans. While
maturities and scheduled amortization of mortgage-backed
securities and loans are a predictable source of funds, deposit
flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions, competition and other
factors.
The primary investing activities of the Company are the
origination of loans and the purchase of investment securities
and mortgage-backed securities. During the six months ended
March 31, 1999 and 1998, the Company had $20.2 million and $16.7
million, respectively, of loan originations. During the six
months ended March 31, 1999 and 1998, the Company purchased
investment securities in the amounts of $25.0 million and $13.5
million, respectively, and mortgage-backed securities in the
amounts of $482,000 and $4.9 million, respectively. The
purchase of interest-bearing deposits increased from $5.0
million for the six months ended March 31, 1998 to $10.4 million
for the six months ended March 31, 1999. The primary financing
activity of the Company is the attraction of savings deposits.
The Company has other sources of liquidity if there is a
need for funds. The Bank has the ability to obtain advances
from the FHLB of Atlanta. In addition, the Company maintains a
portion of its investments in interest-bearing deposits at other
financial institutions that will be available, if needed.
15<PAGE>
<PAGE>
The Bank is required to maintain minimum levels of liquid
assets as defined by OTS regulations. This requirement, which
may be changed at the direction of the OTS depending upon
economic conditions and deposit flows, is based upon a
percentage of deposits and short-term borrowings. The required
minimum ratio is currently 4.0%. The Bank's average daily
liquidity ratio for the month of March was approximately 20.0%,
which exceeded the required level for such period. Management
seeks to maintain a relatively high level of liquidity in order
to retain flexibility in terms of investment opportunities and
deposit pricing. Because liquid assets generally provide for
lower rates of return, the Bank's relatively high liquidity
will, to a certain extent, result in lower rates of return on
assets.
The Company's most liquid assets are cash, interest-bearing
deposits in other banks and federal funds sold, which are
short-term, highly liquid investments with original maturities
of less than three months that are readily convertible to known
amounts of cash. The levels of these assets are dependent on
the Company's operating, financing and investing activities
during any given period. At March 31, 1999, cash,
interest-bearing deposits in other banks and federal funds sold
were $2.8 million, $17.5 million and $8.8 million, respectively.
The Company anticipates that it will have sufficient funds
available to meet its current commitments. Certificates of
deposit which are scheduled to mature in less than six months at
March 31, 1999 totaled $71.5 million. Based on past experience,
management believes that a significant portion of such deposits
will remain with the Bank. The Bank is a party to financial
instruments with off-balance-sheet risk made in the normal
course of business to meet the financing needs of its customers.
These financial instruments are standby letters of credit, lines
of credit and commitments to fund mortgage loans and involve to
varying degrees elements of credit risk in excess of the amount
recognized in the statement of financial position. The contract
amounts of those instruments express the extent of involvement
the Company has in this class of financial instruments and
represents the Company's exposure to credit loss from
nonperformance by the other party.
The Company generally requires collateral or other security
to support financial instruments with off-balance-sheet credit
risk. At March 31, 1999, the Company had commitments under
standby letters of credit and lines of credit and commitments to
originate mortgage loans of $1.5 million, $13.3 million and $4.9
million, respectively.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-
HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
16<PAGE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
Exhibit 27 - Financial Data Schedule
(b) Form 8-K
No Reports on Form 8-K were filed during the quarter
ended March 31, 1999.
17<PAGE>
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
BCSB BANKCORP, INC.
Date: May 14, 1999 /s/ Gary C. Loraditch
------------------------
Gary C. Loraditch
President
(Principal Executive
Officer)
Date: May 14, 1999 /s/ Bonnie M. Klein
------------------------
Bonnie M. Klein
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
18
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,789
<INT-BEARING-DEPOSITS> 17,477
<FED-FUNDS-SOLD> 8,814
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 54,269
<INVESTMENTS-MARKET> 51,369
<LOANS> 190,953
<ALLOWANCE> 1,238
<TOTAL-ASSETS> 281,846
<DEPOSITS> 231,043
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,877
<LONG-TERM> 0
0
0
<COMMON> 61
<OTHER-SE> 45,716
<TOTAL-LIABILITIES-AND-EQUITY> 281,846
<INTEREST-LOAN> 7,153
<INTEREST-INVEST> 565
<INTEREST-OTHER> 894
<INTEREST-TOTAL> 9,564
<INTEREST-DEPOSIT> 4,854
<INTEREST-EXPENSE> 4,858
<INTEREST-INCOME-NET> 4,706
<LOAN-LOSSES> 232
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,770
<INCOME-PRETAX> 975
<INCOME-PRE-EXTRAORDINARY> 975
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 593
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
<YIELD-ACTUAL> 7.10
<LOANS-NON> 747
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,034
<CHARGE-OFFS> 32
<RECOVERIES> 4
<ALLOWANCE-CLOSE> 1,238
<ALLOWANCE-DOMESTIC> 1,238
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
